Correlation Between Armstrong Flooring and Alpha Pro
Can any of the company-specific risk be diversified away by investing in both Armstrong Flooring and Alpha Pro at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Armstrong Flooring and Alpha Pro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armstrong Flooring and Alpha Pro Tech, you can compare the effects of market volatilities on Armstrong Flooring and Alpha Pro and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Armstrong Flooring with a short position of Alpha Pro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armstrong Flooring and Alpha Pro.
Diversification Opportunities for Armstrong Flooring and Alpha Pro
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Armstrong and Alpha is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Armstrong Flooring and Alpha Pro Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Pro Tech and Armstrong Flooring is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Armstrong Flooring are associated (or correlated) with Alpha Pro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Pro Tech has no effect on the direction of Armstrong Flooring i.e., Armstrong Flooring and Alpha Pro go up and down completely randomly.
Pair Corralation between Armstrong Flooring and Alpha Pro
Considering the 90-day investment horizon Armstrong Flooring is expected to generate 31.02 times more return on investment than Alpha Pro. However, Armstrong Flooring is 31.02 times more volatile than Alpha Pro Tech. It trades about 0.17 of its potential returns per unit of risk. Alpha Pro Tech is currently generating about 0.05 per unit of risk. If you would invest 31.00 in Armstrong Flooring on January 25, 2024 and sell it today you would earn a total of 4.00 from holding Armstrong Flooring or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 2.63% |
| Values | Daily Returns |
Armstrong Flooring vs. Alpha Pro Tech
Performance |
| Timeline |
| Armstrong Flooring |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alpha Pro Tech |
Armstrong Flooring and Alpha Pro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armstrong Flooring and Alpha Pro
The main advantage of trading using opposite Armstrong Flooring and Alpha Pro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armstrong Flooring position performs unexpectedly, Alpha Pro can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Alpha Pro will offset losses from the drop in Alpha Pro's long position.| Armstrong Flooring vs. Vacasa Inc | Armstrong Flooring vs. Paysafe | Armstrong Flooring vs. ServiceNow | Armstrong Flooring vs. Amkor Technology |
| Alpha Pro vs. Janus International Group | Alpha Pro vs. Interface | Alpha Pro vs. Beacon Roofing Supply | Alpha Pro vs. Perma Pipe International Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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